Week of March 20, 2000

March 19, 2000


FORD BUYS LAND ROVER
GM, FIAT CONFIRM ALLIANCE
FORD, SPRINT ANNOUNCE SMART ELECTRONICS
GHOSN BECOMES NISSAN PRESIDENT
MITSU NEEDS ASSURANCE FROM DC
L-SERIES, FOCUS TOP RECALL LIST
VW WAITS ON BIG THREE PARTS EXCHANGE
GM MAY JOIN KOREAN COMPANY TO BID ON DAEWOO
OPEC MAY INCREASE PRODUCTION, BUT NOT SOON ENOUGH
AUTOMAKERS OFFER TO FUND ADDITIONAL AIRBAG TESTING
NADA "EMBRACES INTERNET" WITH CAR SHOPPING SITE
TOYOTA SELLING IN SOUTH KOREA
RENAULT RETURNS TO F1, BUYS TEAM
DC DEVELOPS NEW MATERIAL FOR BRAKES

 

FORD BUYS LAND ROVER It's not over 'til it's over, goes the old saying, but Ford Motor Co. has seemingly capped the break-up of BMW's troubled Rover Group by agreeing to buy Land Rover for $2.9 billion. The highly respected manufacturer of high-end SUVs will become part of Ford's Premier Automotive Group, along with Jaguar, Volvo, Aston Martin, Lincoln and Mercury. Ironically, the PAG is headed by Wolfgang Reitzle, BMW's former number two executive, who left the German company a year ago in a debate over Rover. The announcement of the Land Rover sale came barely a day after BMW sold the core of its unprofitable British subsidiary to a new venture capital company, Alchemy Partners, for an undisclosed sum. Alchemy will rename the operations the MG Car Company. BMW is keeping one piece of Rover: It shortly intends to launch a long-awaited successor the pint-sized Mini car. BMW reportedly invested $6 billion in its efforts to turn around Rover, and will take more than $3 billion in write-offs connected to the divestiture. Debate over Rover led three senior executives to resign from the German company on Thursday. The latest news could further fuel speculation that Ford is hoping to buy all of BMW.

Click here for in-depth coverage on the BMW-Rover divorce.


 

GM, FIAT CONFIRM ALLIANCE In a joint press conference Monday, General Motors and Fiat SpA announced a strategic alliance giving GM a 20-percent stake in Fiat. Fiat’s holdings will amount to a 5.1-percent stake in GM stock. The deal affects Fiat Auto only; other units, including Ferrari and Maserati, are not involved. The two companies will remain independent and GM will not have any managerial control of Fiat. The alliance will allow the two companies to focus jointly on powertrain and purchasing opportunities. In both areas, the companies will leverage each other’s areas of expertise to reduce costs. The two automaker’s financing units, GMAC and Fiat Auto Fidis, will also pursue joint ventures, focusing particularly on growing the Europe and Latin America markets. Fiat CEO Paolo Cantarella said that the automaker would concentrate on using the alliance to bring Alfa Romeo back to the United States. Other opportunities cited by the automakers included the area of telematics and a possible relationship between the U.S. online parts exchange of which GM is a part, and the Italian parts exchange, which Fiat has a key role in developing. As part of the agreement, Fiat will have the right to sell its remaining interest to GM and GM will have the right of first refusal. GM CEO Jack Smith said that the alliance was in the works for just three months.

For more on the GM-Fiat deal, click here

 

FORD, SPRINT ANNOUNCE SMART ELECTRONICS Ford announced that it will align with Sprint PCS to bring voice-activated digital wireless communications and Internet features to select 2001 Lincoln models later this year. Among the features will be the ability to make calls or access the Internet with voice commands as well as emergency and roadside assistance. The 1996 Lincoln Continental was the first car to offer in-vehicle telematics.

For more on the Ford/Sprint PCS deal, click here

GHOSN BECOMES NISSAN PRESIDENT Carlos Ghosn will take on the title of president of Nissan, in addition to his current title of COO, according to Yoshikazu Hanawa, the current president. Hanawa, who said the Ghosn deserves the title for his plan to revive Nissan, will remain as Nissan’s chief executive officer. Ghosn, known as "le cost killer," said he had determined where to make cuts to see a 20-percent reduction in costs over three years.

 

MITSU NEEDS ASSURANCE FROM DC The Japanese newspaper Nihon Keizai reported that Mitsubishi is prepared to give DaimlerChrysler a 34 percent stake in the company, provided it allows the use of its brand name and guarantees job security for its employees. The deal would give DaimlerChrysler managerial control over Mitsubishi. DaimlerChrysler refused to comment on the report.

 

L-SERIES, FOCUS TOP RECALL LIST According to the National Highway Traffic Safety Administration’s (NHTSA) most recent recall list, GM recalled 36,848 2000 Saturn L-Series cars to check for leaking fuel from a relief valve. Ford recalled 33,292 of its 2000 Foci to correct a throttle problem. Other recalls included 4,930 2000 Honda S2000s because of interference between the convertible top and the seat belt, 1999-2000 Hummers due to possible leaks in the brake line and 2000 BMW X5s for a potential steering shaft coupling problem.

 

VW WAITS ON BIG THREE PARTS EXCHANGE Volkswagen is taking a "wait and see" approach before deciding whether it will join the Big Three’s online parts exchange. "Details on how this (the parts exchange) will happen have yet to emerge and we want to see how it pans out before making a decision," said Francisco Garcia Sanz, VW’s procurement chief. Separately, VW’s commercial unit said that it is still interested in acquiring a competitor. Although VW did not name any truckmakers, it has been widely rumored that Scania, whose deal with Volvo recently fell through, has been eyeing VW as a candidate for a merger.

 

GM MAY JOIN KOREAN COMPANY TO BID ON DAEWOO General Motors said that it might join with a Korean firm to make a bid for Daewoo Motor, although it has not started talks with any companies. A GM spokesman cited Asia chief Alan Perriton who said that GM wanted to "keep every option open." Separately, Daewoo and its creditors are close to an agreement about the terms of its debt buyout deal, which will clear the way for the sale of Daewoo’s units.

 

OPEC MAY INCREASE PRODUCTION, BUT NOT SOON ENOUGH The Organization of Petroleum Exporting Countries (OPEC) is getting closer to an agreement to increase oil production by 1-1.5 million barrels a day, but the effects won’t be felt soon enough. U.S. gasoline prices have climbed 12 cents in the last two weeks, with the average retail price at $1.59 per gallon. San Francisco, the city with the highest gas prices, saw a 21-cent jump over the last two weeks to an average of $1.83 per gallon. Despite the rapidly rising prices, Energy Secretary Bill Richardson said he is opposed to lawmakers’ recent proposal to temporarily lift the 4.3-cent-per-gallon gasoline tax.

 

AUTOMAKERS OFFER TO FUND ADDITIONAL AIRBAG TESTING The Alliance of Automobile Manufacturers said it was willing to fund additional analysis of crash investigations to resolve the current debate over the 25- and 30 mph airbag tests. The offer, written in a letter to White House Chief of Staff John Podesta, was criticized by consumer groups who say there is already enough data available. Doubling the number of annual crash investigations, as the automakers suggested, would cost as much as $2 million more annually.

 

 

NADA "EMBRACES INTERNET" WITH CAR SHOPPING SITE Next month, the NADA will launch its own car shopping Web site featuring a new and used vehicle inventory and links to dealer Web sites. NADA President Frank McCarthy said the site, which will also have invoice pricing and links to used car trade-in information, shows that the NADA is "embracing the Internet." The NADA will work with the Cobalt Group to get a database of vehicles and to help get dealers who don’t have Web sites online.

 

 

TOYOTA SELLING IN SOUTH KOREA Toyota will be the first Japanese manufacturer to launch a full-scale sales effort in South Korea. The automaker, which recently established the Toyota Motor Korea sales subsidiary, will begin selling vehicles in January 2001. The Korean government lifted the ban on importing automobiles from Japan in July 1999.

 

 

RENAULT RETURNS TO F1, BUYS TEAM After a three-year break from Formula 1, Renault will buy Benetton Group SpA’s F1 unit, Benetton Formula. The $120 million purchase will give Renault control of the team immediately, but Benetton will remain a sponsor for two more years. The return to F1 will help Renault, which is working to expand its operations globally, gain a presence outside Europe.

 

DC DEVELOPS NEW MATERIAL FOR BRAKES DaimlerChrysler researchers have developed a new type of fiber-reinforced ceramic brakes that will not wear or warp. Previously, the technology has been too expensive for large-scale applications, but the new method, which utilizes a combination of carbon and silicon, is cost-effective. Initial studies have shown reliable performance after 180,000 miles of use, thereby greatly reducing and even eliminating the need for replacing brake discs.

2019
The Car Connection
See the winners »
2019
The Car Connection
Commenting is closed for this article
 
Ratings and Reviews
Rate and review your car for The Car Connection
Review your car
The Car Connection Daily Headlines
I agree to receive emails from the site. I can withdraw my consent at any time by unsubscribing.
Thank you! Please check your email for confirmation.